Welcome to Tesla Gigafactory, step inside for a private tour

Posted on
July 27, 2016
by
Matt Pressman

All eyes are on the Tesla Gigafactory this week. The media received private tours this week and the kick-off launch event is scheduled for Friday night. So what's the latest with the Gigafactory? Let's start with the Wall Street Journal who got an exclusive earlier this week with Tesla Motors [NASDAQ: TSLA] CEO Elon Musk. Some big news was revealed: "Tesla Motors Inc. is scrambling to finish building its massive $5 billion battery factory here years ahead of schedule to meet demand for its coming cheaper [Model 3] sedan and provide power for new types of vehicles Chief Executive Elon Musk says are under development."

It's reported that, "Tesla has doubled the number of people constructing the 'gigafactory,' which sits on more than 3,000 acres near Reno. Now, 1,000 workers build seven days a week on two shifts in an effort to start churning out lithium-ion cells by late 2016. 'We have to be ready with cell and pack production well ahead of [Model 3] vehicle production,' JB Straubel, Tesla’s chief technical officer and co-founder, said during a walk-through of the factory. 'We’re accelerating our construction plans and accelerating our planned ramp up of cell production.'"

Above: A look inside the Tesla Gigafactory (Source: Wired)

In addition, it's reported that,"If Tesla is successful at its plant in Nevada, it could outpace all the world’s existing plants’ production by a factor of 10... Panasonic has [already] committed up to $1.6 billion to the factory. Joe Taylor, chief executive of Panasonic North America, said the company is struggling to find qualified workers with manufacturing abilities. 'We are running around like crazy hiring people.'"

Then, yesterday, after touring the Gigafactory, the Drive reported, "Tesla’s Gigafactory 1 will be the world’s largest building... [when] complete it'll be larger than the Boeing’s Washington factory for assembling 747’s. And, soon, it'll be the world's largest battery producer. It’s just 14% finished, this behemoth. Eventually the Gigafactory will stretch 3/4 mile long and 1/2 a mile wide. Raw materials will come in from the south, and finished products will depart from the north, like a massive organism digesting graphite and electrolytes and steel."

Above: Tesla Gigafactory is actually going to take up a small fraction of the 3200 acres Tesla bought (Twitter: @marcodellacava)

A press conference with Tesla CEO Elon Musk, Tesla CTO JB Struabel, and Panasonic Executive VP Yoshi Yamada took place after the media tours. USA Today reported that production of Tesla's new 2170 form factor, "cheaper lithium-ion battery cells will start later this year as opposed to 2017... eventually, 10,000 [workers] will work here... [and Tesla] have tripled the expected output of the completed factory from 500,000 to 1.5 million cars a year." For context, Bloomberg reported that the Gigafactory: "when it's finished, it will be about 10 million square feet, or about the size of 262 NFL football fields."

During the press conference, Musk also gave an update on the Model 3. Electrek reported that Musk confirmed design of the Tesla Model 3 was officially complete -- they were "pencil down" on design. In addition, "Musk said that once at full production, he expects the Model 3 to generate around $20 billion in revenue per year for Tesla with $5 billion in gross profit (or 25% gross margin)... [which] adds up to roughly 500,000 cars per year at a $40,000 price tag."

Above: Another pic of the Model 3 outside the Tesla Gigafactory (Source: Electrek)

Reuters also reported, "Musk said the new plant being jointly developed with Japan's Panasonic Corp could ultimately support 1.5 million electric vehicles a year. Musk said he was confident the partners could eventually lower battery costs to $100 per kilowatt-hour by 2020, well below estimates by competitors. The immediate plans call for Tesla's new Model 3 sedan, due out next year, to reach an annual production level of 500,000 by the end of 2018." In addition, it's reported that, "When first announcing the battery plant, Tesla was talking about a total output of 50 GWh, but this week, Tesla confirmed that the new plant will aim to produce around 150 GWh of battery pack in order to support the company’s plans to produce around 1 million cars in 2020."

So what does Panasonic think? “This gigantic Gigafactory idea I thought was crazy,” said Panasonic's Yoshi Yamada. “I was wrong. There is strong demand for this battery.” After a flood of 400,000 pre-orders came in for the Model 3, it's likely he was convinced. In any event, we'll keep you posted on more Gigafactory news this week as Tesla reveals more details.

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